Inflation and human psychology

Economics is a notoriously unreliable science for predictions. My take on this is that this is due to Economic forecasting being based partly on empirical numbers (which can be quite well predicted), but also on human behaviour, and there is the rub.

As a favourite saying goes, “business is simple, people are complex”, and human behaviour (aka “consumer sentiment”) drives so much of economic activity.

So, today an example of a central bank looking to influence consumer behaviour around inflation.

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store